Rio to push ahead with dividend payment

RIO Tinto chairman Simon Thompson confirmed the company would still pay its final dividend, despite the COVID-19 outbreak.
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Rio declared a record final dividend of US$3.7 billion in late February.

Speaking to shareholders by phone after the company's annual general meeting in London, Thompson noted some of the company's peers, including Glencore, had suspended dividends to preserve cash during the pandemic.

"The board debated this issue on Monday and confirmed that we will pay the dividend, as set out in our annual report," Thompson said.

"We took this decision because Rio Tinto has a strong balance sheet, our operations are running safely, and our order book for iron ore is full.

"This enables us to continue to pay our suppliers and to contribute to national and regional economies, at a time when it is needed most.

"We are also conscious that a large number of our smaller shareholders, particularly in Australia, rely on the Rio Tinto dividend for their pensions.

"We will, of course, review this again, in the light of current circumstances, when we announce our interim results in July."

Like BHP yesterday, Rio CEO J-S Jacques confirmed positive cases of COVID-19 among the company's workforce, but said there had been "very few".

Restrictions put in place in Mongolia, South Africa and Quebec were impacting operations there, which would be further detailed in the quarterly report to be released next week.

"We are supportive of the actions governments around the world are taking to contain the spread of COVID-19," Jacques said.

"We are also pleased that a number of governments are taking measures to support the industry and have recognised the critical role of the mining business."

Rio said yesterday it had paid $7.6 billion in taxes and royalties to governments in 2019, including $6.2 billion (A$8.9 billion) in Australia.

Thompson said Rio's contribution was increasingly important to counter the economic impacts of COVID-19.

He also reiterated Rio's commitment to climate change.

"As the world confronts the immediate crisis of COVID-19, it is vital that we do not ignore the longer term challenge of climate change," Thompson said.

"If the world is to achieve the targets set out in the Paris Agreement, urgent, co-ordinated government action is essential. To create incentives, such as carbon pricing, for industry to invest in new low-carbon technology for these ‘hard to abate' sectors. And to maintain the competiveness of trade-exposed industries during the energy transition."